CONSIDER THIS!
After giving tremendous thoughts to what had happened today, I decided to buy some more right on the close. I bought at 47 earlier, then doubled up again at 44 3/4 wich amounted to a 66% increase in my position from originally buying shares at 50 and 47. I am currently averaged in at 47.75 a share and feeling real good about it. You people are missing important considerations.
1) Last quarter the company was squeezed to make the quarter, and they did. Making that number was considerably harder to do because the company was having production and shipping problems. With those concerns cleared up and book-to-bills over 1.0, picking up the end of this quarter should be relatively easy.
2) The company announced that the sales for July were softened by a 4 or 5 day sales training meeting to bring CSCC and ASND employees together and cross train them on each others products. Last I checked, July only had four weeks in it. ASND was expected to bring in 25% of 340 or 344 million in sales for the quarter, depending on whose estimates you want to use, and they only brought in 63 million or 18.5% or 18.3% of the expected 25%. 25% divided by 4 weeks is 6.25% a week, 4 weeks minus 1 week for training times 6.25% per week is 18.75%. 18.3% vs 18.75% is not all that significant, considering that July and August sales are very dificult to forecast for seasonal reasons. Couple that with the fact that these employees have just had 100's of thousands of dollars invested in them for their training, and you get a sales force that is more enlightened about their counterparts products and are reved up to close the quarter out with a bang!
3) Because this world is so litigate, the company was forced to file the 8-K, even though they still feel confident that they can make the forecasts. The company has no control over whether investor will make or loose money in the stock, and since investors love to sue companies whose stock's cause investors to loose money, the 8-K was merely a defensive manuver.
4) Short term money is likely all that left this stock today, along with weak kneed longer term money. This should leave us with a strong core holding the stock and new optimistic buyers. With nearly 25 million shares trading hands today, I would have to think that most of the people who wanted out got out.
5) This sell off was overdone! Sure there is a little added concern about near term earnings, but we had those concerns all along. Smart money will be buying through the week with more money to follow next week. After we get past this potentially volitile week, induced by options expiration and a slew of econcomic data, investors are going to be looking for stocks to put their recently freed up money in. That is of course, if economic numbers coming out Wednesday and Thursday do not scare the bond market too badly.
6) We have yet to hear from Merrill Lynch analysts regarding this recent turmoil. Merrill is usually optimistic, especially in times when the market is pessimistic and confused, as is the case with ASND investors, and they may likely reiterate their views, which I believe are ST accumulate.
I currently only have about 25% of my money in the market right now. I took it off the table last week in light of the volitility which is being brought on before the release of economic data this week and options expiration. ASND was the only position which I felt I could not afford to part with, and I used todays weakness to reduce my cost basis from $49 to $47.75. I am now fully positioned in ASND, with 25% of my money riding on it, or 12.5% if I was fully margined.
If you were bullish on the stock last week or yesterday, then todays news should not have done much to disrupt those feelings. Gather your thougths and re-evaluate the company, you will likely find that it is still the same company it was yesterday, before todays 8-K.
Wayde. |
